Quick house sale firms under OFT scrutiny

18th April 2013

The OFT is researching the ‘quick house sale’ market and is calling for people who have used, or considered using, these businesses to contact the OFT about their experiences.

Quick house sale providers offer to buy a house or find a third party buyer very quickly, usually at a discount from the full market value. While providers may offer a valuable service, the OFT is concerned that some practices might lead to homeowners receiving much less for their property than it is worth and that any losses could be very high.

The OFT says it is particularly concerned about the risks to people in financial difficulty – including those who have worked up large amounts of debt or are facing repossession. Consumers at risk may also include those who need to sell their property quickly following a relationship breakdown or the elderly, who might need money to pay for their care.

The OFT has listed the sort of practices that would give rise to concern below:

Unclear fee structures, for example imposing an unexpected fee following an encouraging initial valuation, as a condition for progressing the service.

Reducing the price offered at the last minute after someone is financially committed to the transaction.

Making misleading claims about the value of the property or the level of discount to be applied to the sale.

Falsely claiming to be a cash buyer.

Inducing consumers to enter into agreements that prevent them from selling to other buyers, with severe penalties for breach of contract.

The OFT has asked over 50 quick house sale firms to provide information on their business models and practices and would welcome evidence from people with experience of this sector, including valuation experts, estate agents, debt advisors and home owners.

Cavendish Elithorn, OFT Senior Director for Goods and Consumer, says: “Businesses offering quick house sales may provide a useful service for homeowners who need to unlock cash in a hurry. However, they are often used by consumers in vulnerable situations and therefore we are concerned about the risk of consumers being misled and losing out on large sums of money.

‘We want to hear from anyone who has used a quick house sale provider, whether they have had a good or bad experience with the business. We will protect the confidence of anyone who contacts us and their information will be invaluable in helping us to build up a picture of the market and establish whether we need to take action.’

Christopher Woolard, Director of Policy, Risk and Research at the Financial Conduct Authority, says: “We welcome the OFT’s market study. Consumers facing repossession of their home are in a very vulnerable position and it is important that they are not pressured into making poor decisions. ‘This market study is an important piece of work that will explore current practices in the market and, where necessary, make recommendations to improve outcomes for these vulnerable consumers. We will continue to work with the OFT and others to address any concerns in this market.”

23 thoughts on “Quick house sale firms under OFT scrutiny”

Two main themes on your blog today, the very sensitive energy situation of the UK and the blatantly biased propaganda organ of what had become the BBC: a mere tabloid.

Think for yourself! Read everything, listen to everything, but believe nothing no matter where you read it or who said it, not even if I said it, until you’ve researched it yourself and it agrees with your own reason and your own common sense!- Gautama

I am glad to the development of the Internet and the rise of alternative media where much relevant and accurate information can be found and to follow independent observers such as yourself as well as critical thinkers commenting on blogs such as yours.

UCG – Bill Bryson writes about burning coal mines, when they play with coal underground – the engineers in charge are doing lots of guess work. They take risks and subsequent problems are a surprise.

Coal extraction has proved a dangerous business for miners. It has also blighted many towns with subsidence or even wiped them off the map in open cast mining. Coal is very dirty and bad for the environment.

It is a big and urgent question how we power our society going forward. Nuclear fusion is on a back burner – always another 40 years away. I’d recommend adding some urgency to this research.

I hope that engineers and physicist are researching thorium too.I have watched many of Professor Jim Al-Khallili’s documentaries on BBC 4 ( The Atom, The Elements etc..) and was quite struck bu his remark that he and colleagues studied thorium some 20/25 years ago then everybody seemed to forget it.

With resources and determination, human ingenuity is amazing. The Manhattan project delivered in under 5 years. JFK’s moon shot was realised within the decade. With leadership, energy is a solvable problem

Good post, and you hit on the obvious relevance for the Scottish referendum.

There are two points here. The first is that the figures for our oil reserves are simply not credible – the UK consumes around 1.7 million barrels a day, say 600 million barrels a year, which implies that Anglia Ruskin think the North Sea has just over 3 billion barrels left. No-one in the industry pitches the figure that low, or even close, and the Anglia Ruskin report gives no evidence to back their figures up.

Secondly, the BBC report is about the most shoddy journalism I have seen for a long time – sensationalist and totally unchallenging of some frankly very odd claims. Is there nobody at the BBC who notices that this is so much lower than their own figures – see http://www.bbc.co.uk/news/uk-scotland-scotland-politics-26326117 .

The bit that was the least credible was the claim about our coal reserves which contradicted pretty much everything I have ever read on the subject. As to the BBC it has now rewritten much of the article which I presumed happened after the majority of people read it. Whilst I am a fan of correcting errors there is also the danger of rewriting history.

This is not new conduct. by either the climate Ayatollah Harrabin, or the disgraceful BBC.

Obviously, how much oil is extracted from the North Sea depends upon how financially efficient it is to do so, and the major defining factor in this is the price of oil itself.

The BBC bangs on about the OBR’s forecasts for oil revenues, and will not, despite prodding, publish the DECC’s forecast for oil prices alongside the OBR’s. (The DECC’s forecast for oil prices is almost 50% higher)

There are 2.4m homes in Scotland, and the BBC stands to lose £350m in licence fees in the event of Scottish independence, and is ignoring its charter with the collusion of the UK govt. and stonewalling any complaints about its behaviour.

You are entirely right to point out that an estimate of reserves depends on the price of it. Furthermore as the reserves fall the price is likely to rise leading to the likelihood of more reserves being found or being economic to exploit. Of course that assumes an element of free markets which is a moot point at this time.

You may enjoy this from the carbon brief.

“It turns out that the UK has been ‘running out’ of oil for decades. In fact, the UK has had much less than 15 years of oil reserves remaining for the past 30 years”

Electricity from the tides? There are plans afoot to build a tidal lagoon in
Swansea Bay which claims it would power over 100k houses in Swansea.
Will it happen? Strange how some renewables are favoured eg wind….so why not tides – power twice a day for the forseeable future! Also, they provide jobs, leisure facilities, can reduce erosion and control flooding. They can be built quickly compared to Nuclear … 2 years rather than 10. So a relatively modest outlay (Swansea £850M) with a quick return is more likely to be funded privately (vs £10B for Nuclear) … I quite fancy a few shares in a lagoon fund!

South Korea is building a Tidal Barrage (800MW) – completion 2015. It proposes a further Tidal Barrage (1300MW) to start 2017. China is building them too.
The Swansea Bay lagoon should produce 400MW and is considered a SMALL lagoon.
Professor Roger Falconer (Director of the Hydro-environmental Research Centre at Cardiff University) wrote that a combination of a Severn Barrage
and Lagoons around Llandudno, Colwyn Bay, Towyn, Rhyl and Prestatyn
could provide most of Wales electricity needs, protection against
coastal erosion and rising sea levels.
From a supplement of the Western Mail.

A Somerset Levels lagoon could provide power and sort the flooding problem.
Then there’s the Mersey, Morecambe Bay, the Clyde…..

In 1994 a friend’s friend & geology grad went to West Germany. He’d been taught the communist supplied Bulgaria maps were a state secret, imagine his surprise to find better maps on sale in an ordinary book store.